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Utilities Seek to Halt Nuclear Waste Fee

By Matthew L. Wald July 10, 2009 8:02 amJuly 10, 2009 8:02 am

The nuclear industry is contemplating something akin to a rent strike.

Since the early 1980s, utilities have been paying the Energy Department a fee of one tenth of a cent per kilowatt-hour generated in reactors, to pay for a nuclear waste repository. In exchange for the payments, the department signed contracts promising to take the wastes beginning in 1997.

That, however, has not happened, and the goal is getting further away, with the Obama administration having declaring that it won’t use the Yucca Mountain facility — the planned destination for the waste.

Now the power-generation industry wants to stop paying the fee — which would amount to about $769 million for 2009. Some $29.6 billion has already been paid though the end of last year, according to a Bloomberg report.

The law requires the energy secretary to determine every year the “adequacy” of the fee, the industry’s trade group, the Nuclear Energy Institute, pointed out in a letter on Thursday.

It is now well beyond adequate, according to utilities, since the government is spending very little money on the project.

Power companies have already won court decisions that allow them to collect damages, now likely to run well over $20 billion, from the federal government, for their extra costs — including building temporary steel-and-concrete silos, in which old fuel can be stored for decades.

(The Nuclear Regulatory Commission is also preparing to vote on a new policy for waste that would consider such storage adequate for the next few decades, and would permit new reactors to be built even without a long-term plan for waste disposal.)

The states may fall in line behind the utilities and against Washington. On Thursday, the association representing state utility regulators also sent a letter to the energy secretary, backing the utilities’ request to suspend the fees.

“There is no clearly defined program for disposal of spent nuclear fuel and high-level radioactive waste,’’ wrote Frederick Butler, the president of the National Association of Regulatory Utility Commissioners.

Noting that President Obama has promised a commission to explore options for the waste, the letter added, “If we are going to pause to reconsider disposal options, we feel it is also appropriate to pause the fee payments.”

On Thursday, a department spokeswoman, Stephanie Mueller, said that a “blue ribbon” commission that Dr. Chu promised to create to study the waste problem would also examine how much the utilities should be paying. The commission itself has not been established yet.

What subsidies to nuclear? How about a list, or some sort of evidence, instead of probably made-up factoids?

If you want to claim that the Price-Anderson act as a subsidy, first explain why other forms of power generation, like coal plants or hydroelectric dams, don’t have to have similar insurance, and usually don’t pay anything in recompense for the damage they cause?

Also, renewables like solar and wind have been getting operational (production) subsidies over 20 times what nuclear gets, even before the (massive additional) subsidies in this year’s stimulus and energy bills:

In this year’s bills, renewables will get $100 billion in loan guarantees, and ~$60 billion in direct financial aid. Despite the fact that it generates 10 times as much emissions-free electricty as renewables (20% vs. 2%), nuclear got nothing in this year’s (Obama admin.) bills. It did have $18.5 billion in loan guarantees from 2005 legislation. And then, on top of all those enormous subsidies, there is the renewable portfolio standard, which requires a large amount of renewables use, regardless of cost or practicality.

In short, renewables will be getting as much subsidy in the next few years, as jerryd says nuclear got over its entire ~50-year history (i.e., ~$100 billion). Are you suggesting, jerryd, that the renewables industry return all of these massive subsidies, someday? If renewables were cheaper as jerryd suggests, none of the above policies would be necessary. Everyone capable of critical thought should see through this.

The govt. should treat all non-emitting sources equally. How about just taxing or limiting (cap-and-trade) CO2, and letting the market decide how to respond. If one must subsidize, then subsidize all non-emitting sources equally.

This effort seems disingenuous. Even lacking a site to which the waste will be shipped, there are huge problems to be solved on how to ship the waste without danger. One needs to assure that any kind of transportation accident or military style attack will not lead to loss of the waste to the environment. Developing these methods will cost plenty even if we don’t know the destination yet. In fact, we should first determine if it is even possible to ship the waste before deciding that a central location is the correct approach.

DOE should be doing at least ten times the dry runs for waste transport as we anticipate for actual transport to be sure the kinks are completely worked out or proved to be insurmountable. DOE is not spending the money wisely, but it is not as though the money is not needed.

Let’s have a Paul Harvery moment here…the industry is paying that money to the DOE, but said money is collected FROM THE RATE PAYERS…simply stated, they want to stop paying the money, but will we stop paying it to the utilities?

Where is an attorney filing a Class Action Suit on behalf of the ratepayers against the Nuclear Utility companies such as Entergy that are trying too keep for themselves something that is not theirs, but the ratepayers funds?

I don’t want subsidies for any energy sources other than low cost loans so RE can catch up from the massive nuke, oil, coal direct and indirect subsidies that would double their price.

It’s just these subsidies that have gotten in this mess including wars, poisoning so bad of fish we can’t eat them much anymore.

As for nukes it’s 100’s, not 100B of subsidies and why should there be any? Nor is Nuke CO2 free as both the plants and fuel require huge amounts of energy.

Facts are nukes cost 2-3x’s as much as RE and most RE does not have fuel costs after built. Plus we can put RE on our homes paying once for decades of energy vs nuke, fossil fuels who’s price will only rise, making those without RE much more poor.

So facts are installation, fuel for fossil fuels, nukes are going up fast vs RE who’s price is falling, which is the better investment? Personally I’m going RE as smart people will. It’s basic Econo-101.

The nuclear utilities should be under no obligation to continue paying what is in essence a tax with no benefit to either the companies or the customers. In regulated electricity markets the savings would be passed through directly to the rate payers. In deregulated markets the savings would go to the shareholders who are footing the bill now.

In both cases the current tax imposes an unfair cost penalty on clean, carbon-free nuclear electricity.

I find it interesting that there’s no discussion of who will clean up the tens of thousands of broken down wind mills and solar panels that will litter our countryside in the next two decades. Once massive subsidies phase out wind and solar will be unable to compete and their owners will go bankrupt. Taxpayers will be left holding the bag on a huge environmental cleanup. Why aren’t wind and solar owners required to set aside decommissioning funds as do nuclear plant owners?

jerryd is correct in that nuclear plants do cost a lot of money up-front to build. The reason for this is the robust safety systems and government regulation that goes into building a nuclear plant. This is a GOOD thing and a needed thing. These large up-front costs and the huge amount of regulatory red-tape that are required of a new nuclear plant are the reasons that no plants have been built in the US in the past few decades.

However, anyone who actually funds or builds power plants would tell you this-

1) They will never (not even with subsidy) make any money on a wind generator. The benefit of a wind farm only comes from the carbon credits that are gained, making the company’s coal fleet cheaper to run. Simply put, if you want wind, you’ll have to fund it with coal. THIS is the dirty side of this so-called RE.
2) Nuclear plants are very profitable. Even with their large production costs, they boast the lowest operation cost of any kind of power. Simply put, they burn cheap fuel and make an incredible amount of power.

jerryd’s argument of cost is really an argument of pay now vs pay later.

Would you rather pay MORE money up-front to buy a hybrid car? Or would you rather spend very little money to buy a car that breaks down often and will cost you more in maintenance than the cost of buying the hybrid?

Nuclear, while clearly controversial, should not be asked to pay for a service which it is not receiving. Whether you agree with the up-front costs and used fuel issues at nuclear sites, the fact still is that the government asked them to pay for something which was not delivered. This issue has been in the courts for some time. The courts ruled that the government should pay the nuclear industry because of their inability to produce results for the money paid…. but the payments are still being sent. Based on this previous court decision, it’s obvious that the continued payments are not needed.

I don’t know the status of this a year later, but there is one thing I’m quite confident of: the utilities will (or did) fight tooth and nail to hang on to the money rather than return it to the ratepayers.

Some say nuclear gets no subsidies? Huh? When Comanche was built in Texas, who paid for the new roads? The STATE. Who paid for things like water and sewer lines, both to the plant and the new homes and businesses that grew for the plant’s workers? Who pays for law enforcement and, if needed, military protection of the facility? ALL those come from TAX money — i.e., SUBSIDIES.

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